IRVINE, CA -- M-Flex benefited from stronger demand at a key customer, which pushed overall sales 5% higher in its fiscal fourth quarter ended Sept. 30.

Sales for the period reached $201.6 million, but it wasn't enough to boost net income, which ended the period flat, down from $2.4 million last year.

Gross margin fell to 5.8% from 10% the prior year on lower yields and higher labor costs in China. Net cash used in operating activities was $14.2 million.

M-Flex, which specializes in building and assembly flexible printed circuit boards, is the world's 18th largest PCB fabricator, according to the NTI 100.

For the fiscal year ended Sept. net sales were $818.9 million, down 1.5%, primarily due to a decline in sales to a key customer. Net income fell 22% to $29.5 million, including an after-tax restructuring asset recoveries gain of $1.5 million.

M-Flex said it expects net first-quarter sales of $260 million to $280 million and gross margin of 10 to 12%. Chief executive Reza Meshgin said, "As we reported in our pre-announcement last month, we are expecting record revenues and a significant rebound in gross margin in the first quarter of fiscal 2013. We anticipate an increase in sales to both existing and newer smartphone and tablet customers during the first quarter and throughout the balance of the fiscal year."

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